Barton Chocolates used a promissory note to borrow $1,700,000 on July 1, 2015, a

Question

Barton Chocolates used a promissory note to borrow $1,700,000 on July 1, 2015, at an annual interest rate of 8 percent. The note is to be repaid in yearly installments of $340,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2020). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2015. (Do not round intermediate calculations.)

Barton Chocolates used a promissory note to borrow $1,700,000 on July 1, 2015, at an annual interest rate of 8 percent. The note is to be repaid in yearly installments of $340,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2020). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2015. (Do not round intermediate calculations.)

Explanation / Answer

Balance sheet presentation as on december 31,2015

Current liabilities Interest payable (1700000*8%*6/12) 68000 Current portion of long term note payable 340000 Long term liabilities Long term notes payable 1360000 Total liabilities 1768000

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